What business expenses can I claim as a tax deduction in NZ?

One of the most common questions New Zealand business owners ask is: “What expenses can I actually claim?”

With the end of the financial year approaching, now is a good time to check you’re claiming everything your business is entitled to. To make things easier, we’ve created a simple printable Business Expense Claim Guide showing common expenses NZ businesses can claim.

You can download the guide below and keep it handy in the office as a quick reference throughout the year.

The short answer is simple: if an expense is incurred in earning your business income, it’s generally tax deductible.

The tricky part is knowing where the lines are especially when business and personal spending overlap.

What counts as a deductible expense?

A business expense is usually deductible if it is:

• Related to earning your business income

• A normal cost of running your business

• Properly recorded with invoices or receipts

  
  

Common deductible expenses include:

Operating costs

• Office rent or workspace costs

• Power, internet and phone bills (business portion)

• Accounting and bookkeeping fees

• Software subscriptions

• Bank fees and merchant fees

• Insurance for business assets or activities

• Cleaning and rubbish disposal

Vehicle and travel costs

If you use a vehicle for business, you may be able to claim:

• Fuel

• Repairs and servicing

• Registration and insurance

• Lease or finance costs

• Flights for business travel

• Accommodation when travelling for work

• Taxi, rideshare or public transport for business trips

  
  

Only the business portion is claimable.

If a trip includes both business and personal travel, only the business-related portion can be claimed.

Equipment and tools

Items you buy to run your business may be deductible, including:

• Tools and machinery

• Computers and office equipment

• Furniture

• Phones and tablets

• Repairs and maintenance of business assets

Low Value Assets under $1,000 are fully deductible, larger purchases are usually claimed over time through depreciation.

Home office expenses

If you work from home, you may be able to claim part of:

• Rent or mortgage interest

• Rates and insurance

• Power and internet

• Phone costs

Claims are based on the percentage of your home used for business.

Staff and contractor costs

You can normally claim:

• Wages and salaries

• Contractor payments

• KiwiSaver employer contributions

• Staff training and recruitment costs

• Commissions or sales fees paid to staff or agents

Entertainment expenses

Some entertainment costs are deductible, although many are only 50% claimable.

Examples include:

• Client or staff meals and drinks

• Staff social events

• Sporting or cultural event tickets

• Food and drink provided at conferences or events

The claimable portion can vary, so it’s worth checking if you’re unsure.

Common deductions businesses often miss

Many businesses claim the obvious expenses but overlook smaller costs that add up over the year.

Commonly missed deductions include:

• ACC levies paid on business or self-employed income

• Bank and merchant fees

• Licences, registrations and professional subscriptions

• Consultancy fees, including accounting and legal advice

• Legal fees relating to normal business operations

• Small tools and equipment purchases

• Professional development - or courses or training that maintain or improve skills required for the business 

Assets costing $1,000 or less (excluding GST) per item can generally be deducted immediately. Items above this amount usually need to be recorded in your fixed asset schedule and depreciated over time.

If you’re unsure whether something is claimable, it’s always worth checking rather than missing out.

What usually isn’t deductible?

Some costs are personal or specifically excluded, such as:

• Owner drawings or personal spending

• School or childcare costs

• Medical expenses

• Personal groceries or clothing (unless specialist protective gear)

• Gym memberships

• Fines and penalties, including parking and traffic fines

• Personal travel or holidays

• Everyday personal living expenses

A common mistake is trying to claim costs that are partly personal without properly separating the business portion.

Good records matter

Even legitimate deductions can become a problem if records are missing. Keep:

• Receipts or invoices

• Bank and payment records

• Notes explaining mixed-use expenses

• Mileage or vehicle logs where needed

  
  

Good record-keeping saves time, stress and questions later. When in doubt, ask.

If you’d like a simple reminder of what your business can claim, download our printable Business Expense Claim Guide and keep it somewhere visible so expenses are recorded correctly during the year, rather than scrambled together at tax time.

Download the Guide here:

What Business Expenses Can I Claim_.pdf

Download PDF • 317KB

And if you’re unsure whether something is claimable, or want help making sure everything is recorded correctly, we’re always happy to help.

Contact us